Ultimately Sort of Flat if You Use Your Imagination

Here’s a quick and easy method for imagining that bonds were flat today. Step one, go back to yesterday and use 3pm as a closing time (not a crazy request considering that’s the traditional end-of-day marking time for Treasuries). Then do the same for today. The result is that 10yr yields are up about half a bp. Feel free to round that down to 0bps, and voila! Flat day.  That assessment actually fits better with the calendar and the general vibe. AM volatility came and went surrounding budget headlines and bonds are once again flirting with 4.5% 10yr yields on a holiday-shortened, mostly data-free week, waiting for the next shoe to drop.

Market Movement Recap

10:47 AM Modestly weaker overnight with additional selling in the first 2 hours.  MBS down 5 ticks (.16) and 10yr up 4.2bps at 4.492

01:53 PM Decent recovery with MBS down only 3 ticks (.09) and 10yr up 2.7bps at 4.478

04:47 PM Heading out in moderately weaker territory, but in line with y’day’s mid day levels. MBS down 6 ticks (.16) and 10yr up 3.3bs at 4.483